Authorities fix low prices for basic goods, including rice and sugar, in attempt to control inflation; profiteers face six months in jail ‘The government has seized more than 5,000 metric tonnes of hoarded sugar from errant traders,’ minister told Arab News COLOMBO: Sri Lankan authorities took action on Wednesday to control rapidly rising costs of basic goods by fixing prices and confiscating stocks. It came a day after they declared an economic emergency triggered by a sharp fall in the value of the country’s currency as a result of a foreign-exchange crisis. President Gotabaya Rajapaksa announced wide-ranging emergency regulations on Tuesday. They apply to the supply, hoarding and pricing of staple foods such as rice and sugar, in an effort to control rising inflation. Private banks are running out of foreign-exchange reserves to finance imports following a steep decline in the value of the Sri Lankan rupee, which has fallen by 7.5 percent against the dollar this year. Officials said they have already seized large amounts of sugar and other staple goods from rogue traders, and urged all suppliers to comply with the new fixed prices. “The government has seized more than 5,000 metric tonnes of hoarded sugar from errant traders,” Janaka Wakkumbura, the state minister for small plantation crops, told Arab News. He added that authorities have “enough stocks for the next five months,” and have capped the price of sugar, for example, at 130 rupees ($0.65) a kilogram, almost half the pre-crisis cost of 240 rupees. There are stiff penalties for those who ignore the new rules and continue to charge higher prices. “Violators could face up to six months in prison and have their goods taken,” Wakkumbura said. Rajapaksa appointed a retired army officer, Maj. Gen. M. S. P. Nivunhella, as commissioner general of essential services to coordinate the supply of basic goods and oversee operations. “The authorized officers will be able to take steps to provide essential food items at a concessionary rate to the public by purchasing stocks of essential food items,” Rajapaksa said on Tuesday before declaring the economic emergency. “These items will be provided at government-guaranteed prices, or based on the customs value on imported goods, to prevent market irregularities.” Lasantha Alagiyawanna, the state minister for consumer protection, said legal action will be taken against unregistered traders by next week. “To control the price of sugar and rice, a special order was issued on June 11, 2021, authorizing the registration of paddy (unprocessed rice), rice and wheat flour stores under the Consumer Affairs Authority Act,” he said. “Still, middlemen were hoarding stocks of rice and creating an artificial shortage.” His ministry has closed 52 unregistered paddy storage facilities during raids in the past week in the North Central Province, he added. The shortages have resulted in long queues outside stores in recent days as people scramble to buy food and other commodities. This is despite a strict 16-day curfew, which ends on Monday, to curb a surge in COVID-19 cases, as the country of 21 million struggles to contain an outbreak that is claiming more than 200 lives a day. Schoolteacher Shaheera Rozmin told Arab News that the prices of food and other items are “fluctuating daily.” “Some imported medicines are being sold at a 50 percent increase, citing the new dollar rate,” she said. “I hope these new rules will do some good for consumers.” Retailers said the price increases were solely the result of “artificial demand created by traders who hoard important food stocks.” Mohammed Fazeel, general manager of the Mutti-Rice Wholesale Center in Colombo, told Arab News: “The hoarders buy the paddy at a higher rate from the farmers than from the government and resell it at exorbitant prices.” He added that despite the government fixing the price of rice at 98 rupees per kilo and onions and potatoes at 120 rupees, the rules “are not strictly followed.” In an attempt to ease the financial crisis in Sri Lanka, the International Monetary Fund, the Bank of China and the Bank of Bangladesh on Wednesday pledged more than $1.2 billion in loans to strengthen the island nation’s foreign reserves.